Notes to Financial Statements
November 30, 2013
(Stated in US Dollars)
1. Organization
Valmie Resources, Inc. (the “Company”)
was incorporated on August 26, 2011, in the State of Nevada, U.S.A. The accounting and reporting policies of the Company
conform to accounting principles generally accepted in the United States of America (“US GAAP”), and the Company’s
fiscal year end is November 30.
The Company is an exploration stage company
that engages principally in the acquisition, exploration, and development of resource properties.
Exploration Stage Company
The Company is considered to be in the exploration
stage as defined in FASC 915-10-05 “
Development Stage Entities
”, and interpreted by the Securities and Exchange
Commission (the “SEC”) for mining companies in Industry Guide 7. The Company is devoting substantially all of
its efforts to development of business plans and the acquisition of mineral properties.
2. Significant Accounting Policies
Use of Estimates
The preparation of financial statements in
conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues
and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic
filings with the SEC include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect
the financial statements and future operations of the Company.
Cash and Cash Equivalents
Cash and cash equivalents include cash in
banks, money market funds, and certificates of term deposits with original maturities of less than three months, which are readily
convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in
value. The Company had $0 in cash and cash equivalents at November 30, 2013.
Start-Up Costs
In accordance with FASC 720-15-20 “
Start-Up
Costs
”, the Company expenses all costs incurred in connection with the start-up and organization of the Company.
Mineral Acquisition and Exploration Costs
The Company has been in the exploration stage
since its formation on August 26, 2011 and has not yet realized any revenue from its planned operations. It is primarily engaged
in the acquisition, exploration, and development of mining properties. Mineral property acquisition and exploration costs are
expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing
proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using
the units-of-production method over the estimated life of the probable reserves.
Valmie Resources, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
November 30, 2013
(Stated in US Dollars)
2. Significant Accounting Policies -
Continued
Concentrations of Credit Risk
The Company’s financial instruments
that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables
it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of
high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable
government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness
of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Net Income or (Loss) per Share of Common
Stock
The Company has adopted FASC Topic No. 260,
“
Earnings Per Share
” (“EPS”), which requires presentation of basic and diluted EPS on the face
of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator
of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements,
basic earnings (loss) per share is computed by dividing net income/(loss) by the weighted average number of shares of common stock
outstanding during the period.
Foreign Currency Translations
The Company’s functional and reporting
currency is the US dollar. All transactions initiated in other currencies are translated into US dollars using the exchange
rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into
the US dollar at the rate of exchange in effect at the balance sheet date. Unrealized exchange gains and losses arising
from such transactions are deferred until realization and are included as a separate component of stockholders’ equity (deficit)
as a component of comprehensive income or loss. Upon realization, the amount deferred is recognized in income in the period when
it is realized.
No significant realized exchange gain or losses
were recorded from inception (August 26, 2011) to November 30, 2013.
Comprehensive Income (Loss)
FASC Topic No. 220, “
Comprehensive
Income
”, establishes standards for reporting and display of comprehensive income and its components in a full set of
general-purpose financial statements. From inception (August 26, 2011) to November 30, 2013, the Company had no items of
other
comprehensive income. Therefore, net loss equals comprehensive loss from inception (August 26, 2011) to November
30, 2013.
Risks and Uncertainties
The Company operates in the resource exploration
industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks
associated with operating a resource exploration business, including the potential risk of business failure.
Valmie Resources, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
November 30, 2013
(Stated in US Dollars)
2. Significant Accounting Policies -
Continued
Environmental Expenditures
The operations of the Company have been, and
may in the future be, affected from time to time in varying degree by changes in environmental regulations, including those for
future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the
Company vary greatly and are not predictable. The Company’s policy is to meet or, if possible, surpass standards set
by relevant legislation by application of technically proven and economically feasible measures.
Environmental expenditures that relate to
ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending
on their future economic benefits. All of these types of expenditures incurred since inception have been charged against
earnings due to the uncertainty of their future recoverability. Estimated future reclamation and site restoration costs,
when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the
related business operation, net of expected recoveries.
Recent Accounting
Pronouncements
Recent accounting pronouncements that are
listed below did not, and are not currently expected to, have a material effect on the Company’s financial statements, but
will be implemented in the Company’s future financial reporting when applicable.
FASB Statements
In June 2009 the FASB established the Accounting
Standards Codification (“ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied
by nongovernmental entities in the preparation of financial statements in accordance with US GAAP. Rules and interpretive releases
of the SEC issued under authority of federal securities laws are also sources of US GAAP for SEC registrants. Existing US GAAP
was not intended to be changed as a result of the ASC, and accordingly the change did not impact the Company’s financial
statements. The ASC does change the way the guidance is organized and presented.
Accounting Standards Updates (“ASUs”)
through ASU No. 2014-05 which contain technical corrections to existing guidance or affect guidance to specialized industries
or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial
statements would not have been significant.
Valmie Resources, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
November 30, 2013
(Stated in US Dollars)
3. Capital Stock
Authorized Stock
At inception, the Company authorized 100,000,000
common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on
any matter on which action of the stockholders of the corporation is sought.
On December 3, 2013, the holders of a majority
of the Company’s issued and outstanding common stock approved an increase in its authorized capital from 100,000,000 shares
of common stock, par value $0.001, to 750,000,000 shares of common stock, par value $0.001 (the “Authorized Capital Increase”).
The Company formally effected the Authorized Capital Increase on December 4, 2013 by filing a Certificate of Amendment with the
Nevada Secretary of State.
On December 3, 2013, the Company’s sole
director approved a stock dividend of 59 authorized but unissued shares of its common stock on each one (1) issued and outstanding
share of its common stock held by shareholders of record as of December 16, 2013. The payment date for the stock dividend was
December 17, 2013, as determined by the Financial Industry Regulatory Authority (FINRA). Upon the payment of the stock dividend,
the Company had 296,400,000 issued and outstanding shares of common stock, which represents an increase of 291,460,000 shares
over its prior total of 4,940,000 issued and outstanding shares of common stock. The split is reflected retrospectively in the
accompanying financial statements.
Share Issuances
Since its inception (August 26, 2011), the
Company has issued shares of its common stock as follows:
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Price Per
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Date
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Description
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Shares
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Share
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Amount
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09/29/11
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Shares issued for cash
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210,000,000
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$
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0.00017
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$
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35,000
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11/15/11
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Shares issued for cash
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86,400,000
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0.00017
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14,400
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Cumulative Totals
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296,400,000
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$
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49,400
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Of these shares, 210,000,000 were issued to
a director and officer of the Company. 86,400,000 shares were issued to independent investors.
At November 30, 2013, the Company had no issued
or outstanding stock options or warrants.
Valmie Resources, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
November 30, 2013
(Stated in US Dollars)
4. Provision for Income Taxes
The Company recognizes the tax effects of
transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for
tax purposes. Deferred taxes are provided in the financial statements under FASC 718-740-20 to give effect to the resulting temporary
differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs
based on the income taxes expected to be payable in future years.
Exploration stage deferred tax assets arising
as a result of net operating loss carryforwards have been offset completely by a valuation allowance due to the uncertainty of
their utilization in future periods. Operating loss carryforwards generated during the period from August 26, 2011 (date of inception)
through November 30, 2013 of $153,841 will begin to expire in 2031. Accordingly, deferred tax assets of approximately $53,844
were offset by the valuation allowance.
The Company follows the provisions of uncertain
tax positions as addressed in FASC 740-10-65-1. The Company recognized approximately no increase in the liability for unrecognized
tax benefits.
The Company has no tax position at November
30, 2013 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.
No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties
at November 30, 2013. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its
intended exploration stage activities. The tax years for November 30, 2013, 2012 and 2011 are still open for examination by the
Internal Revenue Service (IRS).
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2013
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Amount
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Tax
Effect (35%)
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Net operating losses
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$
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62,227
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$
|
21,779
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Valuation allowance
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(62,227
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)
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(21,779
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)
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Net deferred tax asset (liability)
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$
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-
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$
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-
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2012
|
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Amount
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Tax
Effect (35%)
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|
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|
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Net operating losses
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$
|
76,239
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|
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$
|
26,684
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|
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Valuation allowance
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(76,239
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)
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(26,684
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)
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Net deferred tax asset (liability)
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$
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-
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$
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-
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Valmie Resources, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
November 30, 2013
(Stated in US Dollars)
5. Mineral Property Costs
Lander County, Nevada Claims
On September 30, 2011, the Company entered
into an option agreement that would provide for the purchase of a 100% interest in the Carico Lake Valley Property (the “Property”).
The Property is located in the State of Nevada.
To complete the option, the agreement requires
the Company to make the following payments and incur the following amounts on exploration and development:
a) $15,000 cash on September 30, 2011 (paid);
b) an additional $30,000 cash on September
30, 2013 (not paid);
b) an additional $60,000 cash on September
30, 2013 (not paid);
c) an additional $120,000 cash on September
30, 2014; and
d) incur a minimum of $125,000 ($6,248 has
been incurred as of November 30, 2013) on exploration and development work by December 31, 2013 and every subsequent year thereafter,
through 2014.
The Company is in default in the option payments.
The entity that owns the Property has made the payments due to the Bureau of Land Management, Nevada (“BLM”) and Lander
County. The payments ($6,406) are reflected in accounts payable and accrued liabilities and the annual exploration and development
work.
The entity that owns the Property has indicated
a willingness to work with the Company if the Company reimburses the $6,406 mentioned above and makes an effort to become current
with the option payments of $90,000 that are in default. Otherwise, the owner may terminate the option and explore other financing
arrangements related to the Property.
The Company is responsible for any and all
property payments due to any government authority on the Property during the term of the option agreement (BLM: $3,920 yr., Lander
County: $298 yr.).
The Property is subject to a 6% net smelter
royalty, for which the Company has the right to purchase 3% for a one time payment of $5,000,000 at any time until the tenth anniversary
of the option agreement.
As at November 30, 2013, the Company has incurred
the following on the Property:
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November 30,
2013
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November 30,
2012
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Acquisition cost
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$
|
15,000
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$
|
15,000
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Exploration costs, beginning of period
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$
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6,248
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$
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4,218
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Exploration costs incurred
|
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6,406
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2,030
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Exploration costs, end of period
|
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$
|
12,654
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$
|
6,248
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6. Due to Related Party
Amount due to related party at November 30,
2013, is non-interest bearing, unsecured and with no fixed terms of repayment. During the year ended November 30, 2013, the former
President of the Company forgave $91,343 of debt due to him. The debt cancellation was recorded as additional paid-in capital.
Valmie Resources, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
November 30, 2013
(Stated in US Dollars)
7. Going Concern and Liquidity Considerations
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization
of assets and satisfaction of liabilities in the normal course of business. As at November 30, 2013, the Company had a working
capital deficiency of $19,144 (2012 – working capital deficiency of $48,260) and an accumulated deficit of $159,887 (2012
– $97,660). The Company intends to fund operations through equity financing arrangements, which may be insufficient
to fund its capital expenditures, working capital and other cash requirements for the next twelve months.
The ability of the Company to emerge from
the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and
develop the Property and the discovery, development and sale of ore reserves.
As
discussed in note 5, the Company is in default on its option payments and annual exploration and development work. If the option
is terminated, the Company would have no operating business.
In response to these problems, management
intends to raise additional funds through public or private placement offerings.
These factors, among others, raise substantial
doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
8. Subsequent Events
The Company has evaluated subsequent events
after November 30, 2013, through the date of this report, and determined there are no additional items to disclose.